AUD/USD keeps losses despite big beat on Aussie Q2 construction sector data

A better-than-expected Q2 construction sector data has failed to put a bid under the AUD.
Losses in the S&P 500 futures are likely playing a spoilsport this Wednesday morning in Asia.
Dismal China growth forecasts by Moody’s could hurt the Aussie dollar.

Omkar Godbole FXStreet Contributor

The AUD/USD pair is threatening to snap the four-day winning streak.

At press time, the currency pair is trading at 0.7354 – down 0.25 percent on the day, having rallied 120 pips in the last four trading days.

The weak tone in the Aussie dollar seen today could be associated with signs of risk aversion in the US equity index futures.

Former Trump lawyer Michael Cohen testified yesterday that Trump directed him to commit a crime ahead of the 2016 Presidential election. As a result, the S&P 500 futures dropped 0.45 percent and weighed over the AUD and other risk currencies.

Aussie construction work done in the second quarter – a key component of GDP – came in at 1.6 percent, beating the forecast of 0.7 percent by a big margin, but so far, has not had a positive impact on the AUD/USD, possibly due to fears that Chinese economy is slowing down.

Ratings agency Moody’s expects China’s economy to grow at 6.6 percent this year following a 6.9 percent growth in 2017.

Looking forward, the pair may extend losses if the CNY slides. Further, markets may buy USD as the Fed minutes, due later today, are likely to reinforce expectations of September rate hike.

AUD/USD Technical Levels

Resistance: 0.7368 (session high), 0.7391 (50-day MA), 0.7453 (Aug. 9 high)

Support: 0.7348 (Aug. 3 low), 0.7326 (5-day MA), 0.73 (psychological level)

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Expanding
1H	Bullish	Neutral	High
4H	Bullish	Neutral	Expanding
1D	Strongly Bearish	Neutral	High
1W	Bearish	Neutral	Low
Updated Aug 22, 01:45 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD bounces off lows, back to 1.1860

EUR/USD now manages to regain some balance, retesting the 1.1860-1.1870 band after bottoming out near 1.1830 following the US NFP data on Wednesday. The pair, in the meantime, remains on the defensive amid fresh upside traction surrounding the US Dollar.

GBP/USD rebounds to 1.3660, USD loses momentum

GBP/USD trades with decent gains in the 1.3660 region, regaining composure following the post-NFP knee-jerk toward the 1.3600 zone on Wednesday. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold stays bid, still below $5,100

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of humble gains in the US Dollar and firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.